By Alex Lawler

LONDON (Reuters) -Oil rose towards $79 a barrel on Monday supported by tight supply and hopes of further demand recovery in 2022 spurred in part by a view that the Omicron coronavirus variant is unlikely to significantly dampen the outlook.

Libyan oil output will be cut by 200,000 barrels per day for a week due to pipeline maintenance. OPEC and its allies, known as OPEC+, are expected to stick to a plan to raise output gradually at a meeting on Tuesday.

Brent crude rose 95 cents, or 1.2%, to $78.73 a barrel as of 0923 GMT. U.S. West Texas Intermediate (WTI) crude added $1.03 or 1.4%, to $76.24.

“Infection rates are on the rise globally, restrictions are being introduced in several countries, the air travel sector, amongst others, is suffering, yet investors’ optimism is tangible,” said Tamas Varga of oil broker PVM.

“It seems that the current strain produces less severe symptoms than its predecessors, which might just help us to struggle through the fourth wave of the pandemic.”

Last year, Brent rose 50%, spurred by the global recovery from the COVID-19 pandemic and OPEC+ supply cuts, even as infections reached record highs worldwide.

Some see more gains in 20222.

“Crude and oil product prices should benefit from oil demand moving above 2019 levels,” said a report from UBS analysts including Giovanni Staunovo. “We expect Brent to rise into a $80–90 range in 2022.”

Omicron has brought record case counts and dampened New Year festivities around the world, with more than 4,000 flights cancelled on Sunday.

Nonetheless, an OPEC+ report seen by Reuters on Sunday, ahead of Tuesday’s policy meeting, said Omicron’s impact was expected to be mild and short-lived.

(Additional reporting by Mohi Narayan and Naveen Thukral; editing by Jason Neely)